HPL IPO to be deferred

The much talked about initial public offering (IPO) of Haldia Petrochemicals is likely to be deferred again.

Sources in HPL informed that the board has decided to come out with the IPO in the second quarter of 2005-06.

HPL was expected to tap the capital market in May 2005.

Meanwhile, the chief executive officer of HPL, Swapan Bhowmik has been promoted to the post of managing director at the board meeting of HPL held last week.

The net profit of once beleaguered outfit is likely to jump by 500 per cent in this fiscal following improved pricing of polymers.

HPL sources said the board of the petrochem outfit had discussed the IPO at its last meeting . "HPL will raise funds through IPO but that will be not before second quarter of 2005-06," said sources.

However, the basic proposition of IPO would not change.

According to sources, HPL board decided to go slow on the IPO on mainly two grounds.

First, the board expected HPL's good run to continue in the first quarter of this fiscal and this would result in a better book value and EPS for the company. "The pricing power will be higher in such a case," said sources.

Besides, the HPL board did not want its IPO to hit the market at a time when there were many more IPOs in the capital market.

"It may be lost in the army of IPOs," sources added.

The issue will be managed by Kotak Mahindra, DSP Merrill Lynch and JP Morgan Stanley and its size is likely to be Rs 650 crore.

HPL would offer 30 crore shares and was expected to opt for the book building route for the issue.

However, the sources said that the price band would be finalised only at the last moment.

According to sources, HPL was likely to book a net profit of more than Rs 700 crore in the current fiscal on turnover of around Rs 7,000 crore.

Incidentally, under the terms and conditions of the financial restructuring package of Haldia Petrochemicals, which was approved by the banks and financial institutions, the company was supposed to get its equity listed on the bourses.

The petrochem outfit ended 2003-04 with a net profit of around Rs 130 crore over a turnover of Rs 4,800 crore.

"This is a real achievement at any standard," said sources.

HPL booked its maiden net profit only in the last fiscal following a successful debt restructuring process.